Sunshine dims as project faces another delay
Kwok Ping Sun named executive chairman
CALGARY • Shares of Sunshine Oilsands Ltd. fell almost four per cent Monday after the company announced delays at its West Ells oilsands project for the second time this year.
Sunshine announced Sunday that it won’t begin injecting steam into the wells at its 5,000-barrel-per-day West Ells facility until September — about three months longer that expected — “to assure facilities performance and achieve nameplate capacity.”
Construction at the project is “substantially completed” and the company is in the middle of commissioning various facilities, a company release said.
The company had hoped to begin steaming at the project in the first quarter of this year, but announced in late March that the project’s commissioning date would be delayed until June, with first oil production expected in September.
Sunshine did not respond to a request for comment after the latest delay. The company’s release did not specify when first oil production from West Ells is expected.
Sunshine also did not provide a progress update on a second phase of West Ells, which is expected to add another 5,000 bpd worth of production to the oilsands project. In May, the company said it was seeking an additional $150 million in debt funding for the expansion.
In 2013 the company split the project into two 5,000bpd phases, estimating then it would cost a total of $496 million.
The company’s share price fell 3.85 per cent on the Toronto Stock Exchange Monday to 12.5 cents. The company is also listed on the Hong Kong Stock Exchange, where it has attracted significant investment from China. Its shares in Hong Kong slid 6.8 per cent to HK82 cents.
Throughout May and June, Chinese entrepreneur Kwok Ping Sun has been aggressively buying up stock in Sunshine and is now the company’s largest shareholder with roughly 14 per cent of the company’s outstanding shares, according to data compiled by Bloomberg News. Data from Canadian Insider show Sun, who founded Nobao Renewable Energy Holdings Ltd. in 2007, has acquired 64 million Sunshine shares since May 28.
Sunshine also announced over the weekend that Sun, 51, has been appointed executive chairman of the company’s board while Michael Hibberd, one of Sunshine’s founders, is now the company’s non-executive vice-chairman.
The company also announced that its incoming CEO, Hong Luo, expects a Canadian work permit “imminently.” The company did not provide a start date for Luo.
Sunshine has gone through a rotation of chief executives in recent years, ever since John Zahary abruptly left the company in Dec. 2013. Zahary’s interim replacement, David Sealock, left in Sept. 2014 after nine months on the job, leaving Hibberd to fill in.